Global Cryptocurrency Market Is Estimated To Witness High Growth Owing To The Growing Adoption And Emergence of Blockchain-As-A-Service
The global Cryptocurrency Market is estimated to be valued at US$ 46.14 Bn in 2024, exhibiting a CAGR of 5.7% over the forecast period (2024-2031). Furthermore, rise in the number of retail investors entering the cryptocurrency market will further propel the market growth.
Market Dynamics:
The growth of the global cryptocurrency market is driven by the growing adoption of cryptocurrencies for payments and remittances. Cryptocurrencies allow for quicker and cheaper cross-border payment transfers compared to traditional banking systems. This is encouraging greater adoption among larger enterprises operating globally. Moreover, the emergence of Blockchain-as-a-Service (BaaS) is expanding the use cases for cryptocurrencies beyond mere transactions. BaaS offers cloud-based solutions that enable businesses to leverage the distributed ledger technology of Blockchain without having to develop it internally or maintain the associated infrastructure. This has led to new revenue streams for cryptocurrency and further spurred investments in this market. The increasing institutional investments and emerging favorable regulations around the world also presents an opportunity for the cryptocurrency market expansion over the coming years.
Increasing Popularity of Digital Payment Systems is Driving Growth in the Cryptocurrency Market
One of the major drivers for the growth of the global cryptocurrency market is the increasing popularity and adoption of digital payment systems across the world. Cryptocurrencies like Bitcoin allow for secure, borderless, and instant payments over the internet without involving any intermediaries. Several large companies have started accepting cryptocurrencies as a mode of payment as it offers convenience to customers. Younger generations who have grown up in the digital era are more comfortable using digital currencies for transactions. As more people and businesses use cryptos in their day-to-day financial activities, it will boost further adoption and investments in the market.
Rising Investments from Institutional Investors are Accelerating Market Growth
Another significant driver has been the rising interest and investments from large financial institutions and investors. Cryptocurrencies were initially used only by individuals but now hedge funds, venture capital firms, and large brokerage houses are investing heavily in cryptos. Mainstream investors view cryptocurrencies as an alternative investment class with potential for high returns. This institutional money flowing into cryptos is accelerating their development, raising awareness and expanding the user base. Many cryptocurrency exchanges are launching crypto trading and investment products tailored for institutional clients. Such growing institutionalization of cryptos is set to propel further growth of the global cryptocurrency market.
Regulatory Uncertainty and Volatility Pose Major Restraints
One of the major restraints hampering the growth of the cryptocurrency market is regulatory uncertainty surrounding cryptos across different jurisdictions. Most governments are still formulating clear regulations regarding the classification, usage, and taxation of cryptocurrencies. Cryptos face high risks of being banned or subject to tight restrictions in many countries which adds an element of uncertainty. Volatility in crypto prices also poses a major challenge as it deters many investors. Prices of Bitcoin and other major cryptos have witnessed wild swings, often rising or falling over 50% within weeks. Such high volatility arising from their speculative nature restricts wider adoption among common users.
Security Threats from Hacks and Fraud Weaken User Confidence
Security threats due to hacks and fraud also weaken user confidence in cryptos, thereby acting as a restraint. A number of cryptocurrency exchanges have faced major hacks in the past where millions of dollars’ worth of cryptos were stolen. Rampant spread of crypto jacking and fraud also dent investor confidence. Lack of insurance cover for losses further discourages users. Cryptocurrencies still face serious security challenges which need to be addressed comprehensively before mainstream adoption can take place. Until cryptos attain adequate security assurance, market growth will remain limited to a certain extent.
Emergence of New Use Cases is Creating Novel Opportunities
One of the major opportunities emerging in the cryptocurrency market is the development of novel and diverse applications of Blockchain technology beyond currency transactions. Blockchain is finding new use cases in sectors such as banking, supply chain management, intellectual property and digital identification. Applications like smart contracts, decentralized finance and NFTs indicate expansion in functionality and scope of cryptos. As Blockchain networks evolve to support more complex transactions, it will lower the entry barriers and drive crypto adoption among broader segments. Emergence of new decentralized applications presents substantial growth prospects for the overall cryptocurrency market.
Increasing Acceptance by Established Brands will Drive Wider Adoption
As major brands join the crypto bandwagon, it presents a promising growth opportunity. Several large retailers like Microsoft, Subway, etc. have started accepting Bitcoin payments. Moreover, renowned investment companies have started offering crypto investment products. When large trusted brands adopt cryptos, it significantly boosts user confidence and mainstreaming of the asset class. As cryptocurrency payment solutions get integrated into popular e-commerce platforms and online retailers, crypto transactions will become far more commonplace. Growing brand acceptance is likely to emerge as a pivotal factor accelerating mass adoption and expansion of the global cryptocurrency market.
Link - https://www.coherentmarketinsights.com/market-insight/cryptocurrency-market-927
Key Developments:
- In August 2021, researchers at Los Alamos National Laboratory, a leading U.S. Department of Energy research facility, developed an artificial intelligence-powered system to detect unauthorized cryptocurrency mining activities on the lab's research computing infrastructure. This system helps the lab protect the integrity and availability of its high-performance computing resources, which are critical for advancing scientific research across fields like national security, energy, and climate.
- In November 2021, Mastercard, a leading global payments technology company, announced that it would allow its network of banks and merchants to enable their customers to buy, sell, and hold select cryptocurrencies directly through digital wallets. Mastercard also revealed plans to integrate cryptocurrency rewards and cashback into its loyalty programs, further expanding the use of digital assets within its payment’s ecosystem.
- In March 2021, Open ware Inc., a leading financial technology software company, launched its OpenDAX3 cryptocurrency exchange platform featuring an Exchange Liquidity Network (ELN) to provide enhanced trading services for cryptocurrencies, digital assets, and security tokens. OpenDAX3 is designed to offer improved exchange capabilities and liquidity to facilitate seamless trading of digital financial instruments.
- In October 2020, the Central Bank of The Bahamas, the nation's monetary authority, launched the Sand Dollar, becoming the first central bank to issue a CBDC nationwide. The Sand Dollar aims to promote financial inclusion by providing all Bahamians with access to digital payments and financial services, while also enhancing the security and resilience of the country's payments system.
Key Players:
Argo Blockchain, Bit Digital, Inc., BITMAIN Technologies Holding Company, Braiins Systems s.r.o., Canaan Inc., Core Scientific, F2Pool, Genesis Mining Ltd., HIVE Blockchain Technologies Ltd., Hut 8 Mining Corp., iMining Technologies Inc., MinerGate, Miningstore, Riot Blockchain, Inc., and ASICminer Company
